It’s no secret that the housing market follows a rather predictable annual cycle. The market starts to heat up in spring and is strong through the summer when people have vacation time, school is out, and it’s easiest to physically move thanks to better weather. In the fall, the market starts to slow down, and in the winter, the market is the least active. And that’s exactly why many savvy investors earn their best profits in the winter.
Allow us to explain. A big part of why the winter market is usually slow is the holiday season. People don’t like to move over the holidays, so many sellers take their homes off of the market entirely until the New Year. This means that property investors face a lot less competition and lower prices. Residential rehab loans tend to be more readily available during the winter, because many investors take the opportunity to enjoy a break from work. With fewer investors to compete with and plenty of house flipping funding available to make the initial purchase, property investors can find amazing deals on foreclosure properties and other rehab opportunities during the winter.
On the selling side, once the work is done, it is true that fewer people look for homes during the winter, but those who do are usually in a hurry to buy. Buyers who house hunt in winter usually have a specific reason for doing so, such as a new job. That usually means an abbreviated search window and more willingness to make deals.
Plus, even if buyers aren’t flocking to your house and offering tens of thousands of dollars over asking, the savings at the front end of the flip often make up for the impact of fewer potential buyers on the back end.
If you’re thinking of maximizing your yearly profits with a few winter flips, just keep a few things in mind. First, expect your renovation schedule to be slower, particularly in December, due to the holidays. Unless your someone who does the construction yourself, the added time and costs of winter renovations can cause some trouble. Second, be sure to consider and schedule for possible weather- caused delays. Avoid flips that need any major exterior renovations to help keep your flip on schedule despite rain or snow.